BABCOCK International, the engineering support services company, said it was confident about the next financial year thanks to a strong order book and a growing bid pipeline.
The firm said the slowdown seen in the first-half of the year, which saw the number of new contracts coming up for tender drop, had reversed itself in the previous six months.
The pipepline of bids at invitation or pre-qualification questionnaire stage yesterday stood at £7bn, £1bn higher than at the time of the firm’s interim management statement in January. Shares in the firm rose 3.6 per cent to 598.9p on the news.
Key wins include a five-year contract worth €200m (£176m) to run the facilities at British army bases in Germany and its selection as sole bidder for the Ministry of Defence’s 10-year Maritime Equipment Transformation programme, worth £300m.
Cash generation in the financial year so far has been strong, enabling the company to pay down debt. Net debt at the end of March is expected to be less than £750m, and the resulting net debt to earnings ratio is expected to be below the 2.8 times reported at the end of September.